The Competition and Markets Authority said the merger could reduce competition substantially in gaming consoles, multi-game subscription services and cloud gaming services.
“Following our phase-1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming,” the CMA said.
Both Microsoft and Activision said they will continue to cooperate with the CMA.
“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft president and vice chairman Brad Smith said in an e-mailed statement.
Activision still expects the deal to close in Microsoft’s financial year to 30 June 2023, CEO Bobby Kotick said in a statement.
Microsoft and Activision have until 8 September to respond to the CMA.
Microsoft had previously said a thorough review would boost confidence in the closure of a deal that would be positive for competition.
Read: Investors fret that Microsoft’s $69-billion Activision deal will fail
The company, which makes the Xbox videogames console, announced the deal in January, saying gaming was the “most dynamic and exciting category in entertainment”.
The deal will add franchises such as Overwatch, Candy Crush and World of Warcraft to its gaming business and make it a more powerful competitor to Sony and Nintendo. — Radhika Anilkumar and Paul Sandle, with Sinchita Mitra, (c) 2022 Reuters
